We’ve not lost accounts or lost lanes just in many cases, that the demand environment has been weaker. So demand for our customers’ products, if you will. They’ve not been able to tender as much freight to us. So it’s something that we always are relevant and mindful of where our pricing is relative to others. But we do what we need to do and what makes sense for us. That’s part of our long-term strategic plan and we just make sure we communicate what our needs are going to be with customers. And it’s a model that’s worked. We’ve been able to grow our revenues 11% to 12% on average each year over the past 10 years. And that’s the same formula that we want to be able to work as we move forward. It’s consistent and it sounds like a simple plan, but there’s a lot of complexities behind the scenes, if you will.
And we just want to keep executing and believe we can. And I think that as we go through the next 12 months, if we see some real economic recovery, I think that we’ll see our numbers continue to outperform from a growth standpoint than the industry, just like we’ve seen in prior cycles.
Amit Mehrotra: Got it. Thank you very much. Appreciate it.
Operator: The next question is from Jon Chappell with Evercore ISI. Please go ahead.
Jonathan Chappell: Thank you. Adam, you’re able to handle this surge of 3Q business without really changing the cost structure that much. So as we think about kind of a return to cyclical recovery at some point next year, whether it’s first half or back half loaded, did this surge in volume in the third quarter and October absorb a lot of your spare capacity and a lot of the ability to have the incremental margin expansion, so as you can see the volume recovery on a more sticky basis, you can still increase the cost structure on a lesser one-for-one basis and get that historical OR improvement? Or is there going to be a bit of a catch-up where you’re going to have to add more labor, more resources if the broader demand tailwind actually accelerates next year?
Adam Satterfield: Well, we were in a great spot coming in to this quarter from a labor standpoint, from an equipment standpoint and definitely from a service center standpoint, and we’ve intentionally been heavy. We’ve tried to protect as many driver positions in particular that we could as we’ve gone through this slow period. We certainly have seen some attrition within our workforce over the past year. But we’ve tried to keep as many people on board as we could, knowing that the inflection would individually happened. We believe that it was going to happen earlier in the year. And obviously, we’re disappointed when it didn’t, but we just continue to try to manage through. And here we are. It did happen in the manner that we thought that it would, but we were well positioned to respond and our existing workforce has been able to do so.
Now from here, we have restarted the hiring process in some locations. And we’ll continue to run our internal truck driving schools to produce new drivers and have them available as the demand levels dictate. If our shipment volumes continue to increase, if we can see sequential improvement through next year. We want to make sure that we’ve got all elements of capacity in place to be able to deal with it and not be playing from behind, if you will, and having to try to catch it or not being able to say yes to a customer if they’re coming to us and asking if we can handle incremental volumes for them. So it’s always a challenge to try to walk that tightrope in terms of managing the elements of capacity. But I think that we did a great job with getting through it this year and we may have carried a little extra cost in doing so.
But I think our operating ratio has performed about where we thought it would, given the decrease in volumes. We said earlier in the year that our focus would be to managing our direct cost even in a low volume environment. We’ve been able to do so without any sacrifice whatsoever to our service quality. In fact, some of our service metrics have actually improved as we’ve gone through this year. So we’re pleased with where our service quality is, the performance of our team, the improving efficiencies that we’re seeing. We’ll continue to add to the team and continue to rebalance our fleet as well. As we go through 2024, we’ve still got some deferred replacements that – where we want to improve the average age of our fleet. But all of that will continue to be worked out as we go through the next year or so.
And we want to get back to a growth environment, improving operating ratio environment, all those things we’re kind of used to seeing, we just need a little cooperation from the economy to help us along the way.
Jonathan Chappell: Got it. Thank you, Adam.
Operator: The next question is from Tom Wadewitz with UBS. Please go ahead.
Thomas Wadewitz: Yes. Good morning. Adam, you’ve talked a bit about – I think you said like inflation can come down somewhat next year. And then you’ve talked a bit about price as well, and you’ve seen a pretty constructive view on where price is going to be next year. If we don’t see improvement in the freight market activity, do you think you’d be looking at those two factors supporting margin improvement because it seems like you put those two together, you would see the margin improve. But how do you think about, I guess, lower inflation and a favorable price and what that does for margin, even if you don’t see freight improve?
